A CEO's Signature Can Predict How Financially Healthy A Company Really Is

When it comes to CEOs, an autograph on a yearly SEC filing is a particularly public and
significant demonstration, and a good measure of
narcissism.

A new
study from Charles Ham at the University of Maryland takes a
look at the size of CEOs' signatures on yearly SEC filings and
whether big signatures lead to worse performance.

Narcissistic CEOs have been found to make more aggressive,
unilateral decisions without incorporating feedback, which can
lead to poorer performance.

The study found that CEOs with larger signatures perform worse by
a number of metrics. They have a lower return on assets
despite investing more, pay lower dividends, yet still receive
higher compensation.

So, they spend more aggressively, return less to shareholders,
and keep more for themselves. Those effects are magnified for
firms operating in uncertain circumstances, which makes sense as
impulsive decisions and their negative effects increase in those
times.